Reference no: EM132804710
Problem - You are presented with the following December 31, 2020 unadjusted trial balance and additional information for Webb Industries. All accounts carrying a balance are shown and all accounts have normal balances.
Accounts Payable $28,000
Accounts Receivable $46,000
Cash $75,000
Common Stock $80,000
Dividends $5,000
Equipment $60,000
Prepaid Rent $12,000
Retained Earnings $80,000
Service Revenue $20,000
Supplies ?
Unearned Revenue $8,000
Wages Expense $14,600
Information needed for adjustments -
1. Prepaid Rent was recorded on November 1st when the company paid rent in advance for November 1st through April 30th.
2. A count of supplies on December 31st revealed that $125 remained.
3. A client paid $8,000 in advance on December 2nd. At the end of the year, 75% of that value had been earned.
If the accountant failed to record any adjusting entries, how much would 2020's net income be misstated?